CAIRO: Saudi Arabia's growing business environment has encouraged regional and global companies to establish a local presence in the emerging market.
Egyptian generative AI startup DXwand is leaving no stone unturned as it tries to get closer to its clients with a team on the ground.
In an interview with Arab News, Ahmed Mahmoud, CEO of DXwand, shared the company's strategic insights regarding the establishment of a local office in Riyadh by mid-year.
“We have already started the formalities and obtained the MISA (Ministry of Investments of Saudi Arabia) license. The exact location is still under negotiation, but it should be in the wonderful capital of Saudi Arabia, Riyadh,” he said.
One step closer
Mahmoud emphasized the importance of quickly delivering value and impact through quick wins, and was also keen to demonstrate the company's distinct technology position and long-term ambitions in the partnership.
He said: “This goal is planned to be achieved with local partners in technology and other industries to ensure our success. We already have several partners in Saudi Arabia and our plan is to multiply this number by the end of 2024.
DXwand's expansion strategy is firmly aligned with Saudi Arabia's Vision 2030, focusing on economic diversification and digital transformation.
Mahmoud said: “By focusing on the impact on the areas that Saudi Arabia is focusing on in its 2030 vision, especially economic diversification, quality of life, environmental sustainability and culture and entertainment, we have set long-term goals and corresponding initiatives to support and influence these goals. areas.”
He further explained, “DXwand's expansion always includes local industry-focused or technology-building partners, resulting in greater contributions to each country's economy, faster and deeper impact, and achieving amazing results with local talent and resources who understand the culture and local environment. it hurts very well.”
One of these partners is AstroLabs' Gulf expansion platform, which aims to leverage DXwand's strong presence in the US, UAE and Egypt.
Mahmoud emphasized the importance of working with official bodies to improve the services of their sector.
“Collaboration with the Saudi government is a key cornerstone to realizing our expansion vision and we are in the process of identifying potential areas of collaboration and government entities involved,” he said.
This collaboration is intended to support DXwand's compliance with the country's evolving regulatory environment.
Our solutions align with the country's goals to improve digital infrastructure, improve government services and foster innovation.
Ahmed Mahmoud, CEO of DXwand
“Artificial intelligence regulation is an emerging area not only for Saudi Arabia, but globally. We believe in timely collaboration with regulators that will benefit both parties in understanding risks and creating proactive mitigations. We believe that AI companies should be responsible, regardless of regulations, for building secure AI technology and ensuring that it adheres to privacy and security standards around the world,” said Mahmoud.
“This will help us adapt to all regulatory needs in Saudi Arabia as we proactively mitigate risk and ensure a safe experience for our community,” he added.
Mahmoud said the company has been growing by a factor of two annually since 2020 and aims to maintain that trajectory along with delivering two national impact initiatives per year.
He added that Saudi Arabia will be the main geographic area for one of these national impact initiatives in 2024. “We believe that Saudi Arabia has all the necessary elements of success to implement not only one of our national initiatives, but could even be the best.” he said. he said.
Mahmoud also revealed that the company is preparing three new products that use their generative AI technology, although the details are still under wraps.
“With the help of our joint partners, we are preparing three new products using our same generative AI technology. We cannot share more details about these at this time as we will have them communicated to the relevant partners very soon,” he said.
Expansion into Saudi Arabia is key to DXwand's strategy due to factors such as alignment with Vision 2030, market opportunities and government support, Mahmoud emphasized.
He further explained the alignment of DXwand's AI solutions with the Vision 2030 ambitions of economic diversification and digital transformation.
“Our solutions align with the country's goals to improve digital infrastructure, improve government services and foster innovation,” he said.
He added that significant investments in sectors such as healthcare, education, financial services and tourism represent lucrative opportunities for DXwand.
The government's support for the knowledge-based economy and investment in technology is also in line with his company's goals, Mahmoud said.
Initiatives to attract foreign investment and create a favorable business environment make Saudi Arabia a strategic location that offers access to other Middle Eastern markets and serves as a springboard for regional expansion, Mahmoud explained.
The tech-savvy Saudi population provides a receptive market for AI-driven solutions. “This demographic is receptive to adopting new technologies and creates a favorable environment for AI solutions,” he said.
Business basics
In terms of funding, DXwand has raised US$6.7 million since inception, with the final Series A round of US$4 million closing in December 2023. This investment will drive DXwand's establishment in Saudi Arabia, foster strategic partnerships with local partners, educational institutions and strategic clients. .
Mahmoud said: “We plan to use a portion of the fund to fuel DXwand's first establishment activities in Saudi Arabia and support strategic partnerships to build an ecosystem that will ensure DXwand's growth ambition while partnering with Saudi Arabia to influence and accelerate the realization of its 2030 vision results and nationwide impact.”
Addressing industry challenges in Saudi Arabia, Mahmoud discussed the hype surrounding generative artificial intelligence and DXwand's approach to finding specialized solutions.
He noted that DXwand's platform, DXP, is designed to address issues such as the high cost of a large language model, lack of controlled accuracy measurement, and slow time to market.
“DXwand's DXP platform offers more than 90 percent cost optimization using lower-end LLM offerings while increasing accuracy by more than 30 percent with a single tool that enables measurement experiments and RAG (augmented search generation) for easy accuracy and cost optimization,” he said Mahmoud. .
DXwand operates on a subscription-based business model, selling its products with an annual or monthly subscription based on the size of the problem represented by the volume of conversations or the number of users.
Mahmoud said DXwand is a profitable company with a sound financial model to ensure profitable unit economics.
The motivation to found DXwand stemmed from Mahmoud's experience at Microsoft, where he saw the potential for AI ventures focused on the cultural and linguistic needs of the region.
“This potential was untapped and it gave me the temptation to take a leap of faith and resign from such a well-respected international Silicon Valley giant and start the DXwand journey,” he said.
Key performance indicators for DXwand include LLM cost optimization, overtime accuracy, new registrations, new contracts, new partners and time to market.
Mahmoud emphasized the importance of carefully managing growth in Saudi Arabia to maintain its reputation and customer experience.
“Specifically for Saudi Arabia, as we are still newly introduced, I would focus on new partnerships, new client sign-ups and their cost and accuracy optimization experience,” he noted.
Mahmoud assesses the current situation in Saudi Arabia's AI and technology market as rapidly evolving, with a number of opportunities and challenges.
He highlighted the Saudi government's leadership and investment in economic diversification, digital transformation, artificial intelligence and talent development.
“With government leadership and investment in economic diversification, digital transformation, artificial intelligence and talent development, we foresee a great opportunity for growth in such an emerging market with a remarkable GDP (gross domestic product) and population,” he said.
In terms of industry predictions, Mahmoud expects a decline in adoption due to economic factors and the cost of operating generative AI, impacting their business cases. However, he sees an opportunity in this.
“We anticipate a decline in adoption driven by economic factors and the cost of operating generative AI and their impacts on their relative business cases, which is a great opportunity for the next year or two to take advantage of this challenge if you have a solution that can deliver such technology with cost-effectiveness and capability of rapid scaling,” he explained.
